Entrepreneurship
Product Metrics: The Key to Making Better Product Decisions
Hyperspace Ventures
Sep 19 2023 · 1 min read
Product managers have many responsibilities on their plate ranging from developing strategies for their products to improving their user experience. One of the key indicators of how good a product or feature is in achieving its goal or objective are metrics. Metrics are effective in decision-making because the numbers do not lie; they are based on data that is gathered from the user's activity. It also allows organizations to know where parts of the product are doing well and parts that might be underperforming and how to improve it.
Every product is different, but these are among the most common and important metrics to track so you can start leveling up your business:
Conversion Rate
- Measures the likelihood of a user (can be a free user) converting into a customer (can be a paid user)
- An indicator of your product's success in solving customer problems and the effectiveness of marketing efforts
Churn Rate
- Measures the percentage of customers who no longer uses your product after a certain period
- Key when there is a lot of competition in the market,
- Prioritize and focus on why customers are turning to your competitor and take actionable steps to minimize
Net Promoter Score
- Measures the likelihood that a customer will promote or recommend your product to others
- A direct indicator that they are satisfied with the product and are willing to recommend it
Daily/Monthly Active Users
- Measures the number of active users per day/per month
- This is great if you want to track the engagement of your product
When picking your metrics, make sure you give enough time for the data to cure so you begin to identify trends. Looking at the metrics too early might give you a false sense of what the customer is experiencing, which can slow your progress in achieving your goal and hurt your business’s growth.
